What Does the Democratic Party Actually Believe?

[geek tragedy]

74. You are the one hurling attacks, not I, if one actually reads the posts.

It is not my fault your posts make no sense and have little bearing to reality.

So insurance companies still make a guaranteed 25% markup on a larger volume of business, and the public still pays that markup along with higher and higher prices charged by providers.

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If you have a smattering of business knowledge, you know that a 20% margin that the insurance companies are capped at requires marking up the cost by 25%. For example, if the provider charges $4 for a service, the insurance company adds $1 to that, which is a 25% markup. The resulting charge to the insured is $5, of which the cost to the insurer is $4, or 80% as required by the ACA. That is a 25% MARKUP, as I stated in my comment.

Sir, it is not I who is demonstrating, to use your phrase "a vast degree of ignorance."

1) they are not 'guaranteed' anything--if they don't deliver coverage at competitive prices, they will go out of business since consumers can simply take their business elsewhere. that's the entire idea of the exchanges. such market-based pressure may in fact reduce their overhead+profit below 20% in order to remain competitive. This is basic stuff, your inability to grasp it is not a mark in your favor.

2) insurance companies do not "mark up" costs--they take in premiums, and then pay the amounts invoiced by the providers.

And note that you said they "make" a mark up of 25%. Clearly an incorrect statement on your part--they make at most 20%. In fact, it is a GUARANTEED that they will make less than 20% profit, since their overhead and costs--from salaries to the electricity needed to run the computers--comes out of that 20%.

3) perhaps you meant to say that insurance companies can represent up to a 25% transaction cost (note: not guaranteed, 25% is a ceiling, not a floor), so if X is the value of services provided, and Y is the value of premiums paid, then Y=1.25*X. There are several embedded assumptions in this, some almost certainly false. One such assumption is that NONE of the maximum 20% devoted to profits and administrative expenses are necessary. Another is that insurance companies will have no motive to push back on provider prices, when quite clearly they will and are doing so--it is not uncommon to read about providers that are extremely expensive not taking certain insurance companies because those insurers are not willing to pay those prices.